ASX 200 afternoon report: July 27, 2023

The ASX 200 trades 60 points (0.82%) higher at 7462 at 3.10 pm AEST.

ASX 200 gains momentum after Fed rate hike

After months of sideways, indecisive trading, the ASX 200 has today extended yesterday's post-CPI rip higher after the FOMC, as expected, raised rates by 25bp to 5.25%-5.50%. The Fed retained its tightening bias in the accompanying statement and noted its data dependency.

However, in the Fed Chair's press conference, more dovish tones emanated, suggesting the Fed feels its rate hiking cycle is nearing a conclusion. "The federal funds rate is at a restrictive level now. So if we see inflation coming down credibly, sustainably, we don't need to be at a restrictive level any more. We can move back to it, to a neutral level and then below a neutral level at a certain point."

Q2 2023 earnings: Meta surges post earnings report

Adding fuel to the fire and providing a bullish backdrop to local tech stocks, the share price of Facebook earner Meta surged 7.3% to $319 in after-hours trading as its earnings report provided beats at both the top and bottom lines.

(EPS of $2.98 vs $2.89 expected and Revenue of $32B vs $31B).

• Reported EPS: $2.98 (expected: $2.89)
• Reported Revenue: $32B (expected: $31B)

The ASX 200 market movements today

Mining sector

Megaport surged 11.96% to $10.39 after its 4Q 2023 report showed its first-ever cash flow positive quarter. Seek gained 3.54% to $24.86, Appen gained 3.2% to $2.26, and Xero added 2.81% to $123.49.

Consumer-facing stocks

Falling inflation and the prospect of central banks on hold had consumer-facing stocks dancing for joy. Kogan gained 7% to $6.85, Adair's gained 6.95% to $1.66, Nick Scali gained 5.1% to $10.32, and Harvey Norman gained 3.57% to $3.77.

Financial sector

A similar story for most of the big banks as CBA gained 1.8% to $106.93, NAB added 1.73% to $28.53, Westpac added 1.35% to $22.38, and ANZ gained 1.25% to $25.77. Bucking the trend, Macquarie dived 4.79% to $174.26 as lower volatility in markets weighed on earnings.

Energy sector

Rio Tinto, whose earnings reports mark the start of earnings season, fell 2.25% to $118.10 after reporting revenues and dividends fell more than expected. Fellow mining giants Fortescue fell 2.28% to $23.10, and BHP fell 0.92% to $46.55.

Lithium sector

The Lithium space remains volatile. Pilbara Minerals has recovered to be trading at $5.05 today after falling 13% from a high of $5.25 last Wednesday to a low of $4.58 on Monday. After disappointing production guidance, gold miner Regis Resources dived 11% to $1.86.

ASX 200 daily chart

Yesterday's rally saw the ASX 200 break and close above a strong layer of resistance at 7360/90. Providing the ASX 200 can hold above support at 7320/00 in the coming sessions, look for the rally to test year-to-date highs at 7567.

ASX 200 daily chart

_{TradingView: the figures stated are as of July 27, 2023. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}